Discussing your financial situation with a bankruptcy attorney in Houston can help you decide whether filing for bankruptcy is right for you. For example, if you have primarily unsecured debt like credit card debt, filing for bankruptcy may greatly benefit you. However, if your debt includes student loan debt or past due family support obligations, like child support, bankruptcy will not discharge these debts. However, no matter if you decide to file for bankruptcy or not, a bankruptcy attorney in Houston will carefully review your situation and offer you advice regarding whether you should file for bankruptcy and what type of bankruptcy is right for you.

Choosing the Right Bankruptcy
In Houston, you may have the option of filing for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is a liquidation proceeding that involves selling your non-exempt assets to repay your creditors in order of their priority. To be eligible to file for Chapter 7 bankruptcy in Houston, you must earn less than the median income for the state of Texas, or have very little disposable income remaining each month after paying all of your necessary expenses. As of 2011, the median income for the state of Texas is $39,673 for a single individual. Therefore, if you earn more than $39,673 per year, you may be ineligible to file for Chapter 7 bankruptcy unless your disposable income each month is very low. Generally, the less disposable income you have remaining each month, the more likely you are to be eligible for Chapter 7 bankruptcy. However, your bankruptcy attorney in Houston will calculate whether you are eligible to file for Chapter 7 bankruptcy using the means test. Congress amended the Bankruptcy Code in 2005 to include the means test to determine Chapter 7 bankruptcy eligibility.

However, if your bankruptcy attorney in Houston finds you ineligible to file for Chapter 7 bankruptcy, you still may be able to file for Chapter 13 bankruptcy. In addition, Chapter 13 bankruptcy allows you to keep your assets following the bankruptcy. Chapter 13 bankruptcy is a repayment plan, which requires you to make monthly payments toward your debts to your Chapter 13 bankruptcy trustee. Typically, the repayment plan will last between 3 to 5 years, and the bankruptcy court must approve the plan before you begin to make payments. If you make all payments on time and in full throughout the plan, you will receive a bankruptcy discharge at the completion of the plan. However, to be eligible for Chapter 13 bankruptcy, you must be able to show the court that you have regular and reliable income. This is necessary to prove to the court you will be able to afford the monthly payments to your Chapter 13 bankruptcy trustee.

Avoiding a Dismissal of Your Case
The bankruptcy court has the authority to dismiss your bankruptcy case for numerous reasons. Therefore, throughout your bankruptcy case, your bankruptcy attorney in Houston may caution you against doing anything that may cause the dismissal of your case. For example, a bankruptcy court may dismiss your Chapter 13 bankruptcy for failing to make a monthly payment to your bankruptcy trustee on time. It does not matter how many payments you have made on time, the court can dismiss the case even in the last month if you make a late payment. In addition, things that you did prior to filing for bankruptcy can affect your bankruptcy case as well. For example, if you transferred assets to a family member or friend prior to filing for bankruptcy, the bankruptcy court may dismiss your case due to a voidable transfer. Therefore, it is extremely important to discuss your entire financial situation, including your financial history, with your bankruptcy attorney in Houston.

Prior to filing for bankruptcy, you may have several questions regarding the bankruptcy process and how the bankruptcy will affect your credit future. Therefore, if you are considering filing for bankruptcy in Houston, contact an experienced bankruptcy attorney in Houston as soon as possible. In addition, the Southern District of Texas’ bankruptcy court’s website has information about filing for bankruptcy in Houston, http://www.txs.uscourts.gov/bankruptcy/. If you are considering filing for bankruptcy without the assistance of an attorney, visit http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/FilingBankruptcyWithoutAttorney.aspx for additional information regarding how to file for bankruptcy on your own.